The Best Route to European Residency Right Now?

Greece has announced yet another change to its Golden Visa program.

This comes after several earlier tweaks designed to relieve pressure on the country’s housing market. These changes included higher minimum investments for residential properties and rules favoring less-populated parts of the country.

A few years ago, you could buy a property for just €250,000 ($276,000) anywhere in the country and get a Greek Golden Visa. Today, the minimum investment in residential property is €400,000, and it’s €800,000 in high-density areas (such as the capital, Athens, and popular tourist islands).

I plan to return to Greek Golden Visas next week… but today I want to focus on the trend illustrated by the latest development in Greece… (And more on exactly what that development is, very shortly.)

First, a bit of background…

The Golden Visa concept arose following the 2008 global financial crisis. Debt-struck European countries wanted to boost property values and re-capitalize their banking systems. They threw open their housing markets to foreign investors. In some cases, anybody willing and able to plunk down €250,000 on a property got a five-year residency permit that only required them to be in the country a few days a year.

That tiger turned out to be difficult to hold by the tail. So much money flowed into some cities that they became unaffordable to locals. Portugal canceled its residential Golden Visa and Spain announced it would also abolish its residential Golden Visa…

But here’s something important to note: Golden Visas aren’t going away. However, investing in property to get a Golden Visa is becoming harder. There’s now a trend of countries limiting qualifying investments to sectors they feel will help their economies without causing social and political disruption. Portugal, for example, now limits Golden Visas to people purchasing significant stakes in Portuguese venture capital funds, or making donations to cultural projects.

While the death of residential Golden Visas grabbed the headlines… there’s a major counter-trend that’s taken hold—and it’s gone largely under the mainstream radar.

Portugal, for example, launched a Highly Qualified Investor (HQA) visa with an investment threshold far below the old residential program. For just €175,000, you can get a five-year residency permit with no time-in-country requirement. You also get a huge tax break (particularly notable given that the country has canceled its Non-Habitual Resident tax scheme, which was very favorable to expats).

So, what’s the catch? The investment must be in a “startup” company. Not just any new company: it must have a business plan that relates to innovative new technologies, and it needs to be linked to Portuguese research institutions.

That sounds like it might be something only for tech types. But the reality is that the investor doesn’t have to do anything. If you can find local partners with a business idea, all you’ve got to do is supply the money. Then you can sit back and enjoy life in Portugal. (Naturally, local consultancies have emerged to help make matches between investors and local partners.)

Other countries in Europe offer startup visas, like the UK, France, and Germany. But they require the investor to be the main entrepreneur and driver of the new business. In other words, they want more than money; they want entrepreneurship.

Portugal isn’t alone in focusing primarily on the money aspect. Italy, Denmark, Estonia, Ireland, Sweden, and Finland offer similar hands-off startup visas.

And that brings us back to where I started this dispatch…

Now, Greece has thrown its hat into the startup ring. For a minimum investment of €250,000, foreigners can get a five-year renewable residence permit that includes family members.

Further details are expected shortly… but to be competitive with other European startup visas, it’ll probably come with significant tax breaks.

This development reflects the growing maturity of residency-by-investment in Europe.

Gone are the days of financial desperation, bad enough to justify selling the country’s residential housing stock to all comers. Nowadays, clever European policymakers seek targeted benefits for their societies and economies. Startup visas are one example. So too is the increased emphasis on income-based visas, like independent means, retiree, and digital nomad permits. (All with much lower entry levels—in terms of the cash you have to show—compared to a Golden Visa… you just need to show a minimum monthly income. The minimum monthly incomes, depending on the visa, range from about $1,000 to about $3,800 per month.)

European countries are not giving up on Golden Visas… They’re just refining them to better suit their needs.

And it’s actually making residency-by-investment in Europe cheaper than ever.